House Committees: The Unsustainable Path
A look at the Parliamentary Budget Officer’s sobering fiscal outlook, police testimony on bail reform, and Canada’s struggle to develop its critical minerals.
It’s not every day you hear a senior parliamentary official use the word “unsustainable” to describe the country’s finances, but yesterday was one of those days. The Parliamentary Budget Officer’s latest report paints a sobering picture of Canada’s fiscal trajectory, a theme of strain that echoed through committee rooms discussing everything from bail reform to critical mineral development.
This edition will take you through the key testimony.
Estimated reading time: 5 minutes.
ECONOMY
Parliamentary Budget Officer Warns of “Unsustainable” Fiscal Path
Driving the news: The interim Parliamentary Budget Officer, Jason Jacques, told the Standing Committee on Government Operations and Estimates that his office’s latest fiscal projection shows a federal debt-to-GDP ratio that is rising over time, a first in 30 years.
Catch-up: The PBO’s new Economic and Fiscal Outlook, published on September 25, 2025, projects a budgetary deficit of $68.5 billion for the current fiscal year (2.2% of GDP). The federal debt-to-GDP ratio is projected to hit 42.5% this year and continue to rise, a reversal of the government’s long-standing fiscal anchor of a declining ratio.
The Big Picture: The outlook does not yet include the costs of achieving the 5% of GDP NATO defence spending pledge or approximately $20 billion in uncosted Liberal platform promises.
Why it matters: Jacques described the projection as “shocking” and stated the current path “isn’t sustainable”. He explained that the term “unsustainable” implies you do not have the option to wait and see; a change in revenues or spending is required to arrest the trend. This sobering assessment sets a tense backdrop for the government’s upcoming budget on November 4.
What’s next: All eyes will be on the Minister of Finance’s budget to see what plan the government will present to address the PBO’s projections and re-establish fiscal stability.
JUSTICE
Police Associations Describe “Revolving Door” Justice System
Driving the news: Presidents of the Canadian Police Association, National Police Federation, and Toronto Police Association provided frank testimony to the Standing Committee on Justice and Human Rights regarding bail, sentencing, and repeat violent offenders.
Catch-up: The committee is studying the handling of repeat violent offenders, a topic police associations say has led to an erosion of public trust in the justice system.
The Big Picture: Witnesses described a system where frontline officers repeatedly arrest the same individuals for crimes committed while on judicial interim release, creating a cycle that drains police resources and is “dangerous and demoralizing”.
Why it matters: The testimony highlights a significant gap between the law and its practical application. Tom Stamatakis of the Canadian Police Association noted a “futility” that is causing some police officers to disengage from proactive intervention. Key recommendations included creating a stand-alone offence for breaching parole, better data sharing between jurisdictions, and stronger reverse onus provisions for violent offenders. Here’s the detail I find most revealing: officials noted that data on an accused’s history of breaching release conditions often does not follow them across provincial jurisdictions, leaving judges to make bail decisions with incomplete information.
NATURAL RESOURCES
Critical Mineral Development Hindered by Infrastructure and Capital Challenges
Driving the news: Officials from Natural Resources Canada and executives from mining companies told the Standing Committee on Natural Resources that Canada is struggling to capitalize on its vast critical mineral wealth due to significant hurdles in financing and infrastructure.
Catch-up: The committee is studying the development of critical minerals, which are deemed “strategic assets essential to our national and economic security”. Canada is a top-five global producer for 10 critical minerals and holds one of the largest known reserves of rare earth elements.
The Big Picture: Witnesses stated that while cumbersome regulations are a factor, the primary challenges are raising the necessary capital in a volatile market and the lack of infrastructure, especially in remote northern regions.
Why it matters: The global demand for critical minerals presents what one official called a “generational opportunity” for Canada. Industry leaders are forming a rare earth consortium to pool risks and accelerate development, noting that a collaborative approach could shorten project timelines by a minimum of five years. Without a clear government framework to support such initiatives and address infrastructure gaps, witnesses worry Canada will miss the opportunity to become a reliable leading supplier for its allies.
On The Docket
Foreign Affairs: Officials from the Department of Foreign Affairs and the Department of National Defence briefed the foreign affairs committee on recent Russian airspace violations over NATO territory, including incursions by drones and fighter jets over Poland, Romania, and Estonia since September 10. NATO has launched Operation Eastern Sentry in response, but officials noted these incursions are part of a broader pattern of Russian hybrid activities designed to test allied responses.
Public Accounts: The Standing Committee on Public Accounts reviewed an Auditor General’s report on the use of federal office space, finding that Public Services and Procurement Canada has made little progress in reducing its portfolio, achieving less than a 2% reduction since 2019. The report also criticized the federal lands initiative for affordable housing, noting its definition of “affordability” is not based on household income, meaning it doesn’t fully benefit the lowest-income renters.
Agriculture: Agriculture and agri-food stakeholders told their standing committee that regulatory delays, particularly at the Pest Management Regulatory Agency (PMRA), are undermining the sector’s competitiveness. Witnesses cited approval times of up to a decade for some products and noted that new technologies like application drones, available for years in the U.S., still have no clear approval pathway in Canada.
In Their Own Words
The Parliamentary Budget Officer on Canada’s Fiscal Situation
The Quote: “It’s the first time in 30 years that I’ve seen one in which that ratio is going up over time. That’s definitely a cause for concern.”
Why it matters: This statement from interim PBO Jason Jacques to the government operations committee underscores the severity of his office’s latest economic and fiscal outlook. For three decades, the guiding principle of federal finance has been to ensure the debt, relative to the size of the economy, was either stable or declining. Jacques’s testimony confirms this fiscal anchor has been lost under current projections, a situation he later described as “unsustainable” without changes to government revenue or spending.
Also Noteworthy
The Natural Resources committee passed a motion to undertake a parliamentary mission to the Saguenay–Lac-Saint-Jean region and Sudbury during the week of October 14, 2025, to review mining and transportation infrastructure projects.
Police representatives told the Justice committee that organized crime groups are increasingly recruiting youth to commit serious crimes, knowing the sentences under the Youth Criminal Justice Act are less severe.
The Standing Committee on Official Languages will hold a meeting by October 21 to examine the renewal of the interpreters’ contract amid concerns about declining service quality.
Despite having 46 active critical mineral mines and 171 advanced-stage projects, it can take an average of 20 years to bring a new mine online in Canada.
Officials at the foreign affairs committee confirmed that Canada has not deployed fighter jets to Europe but does have four Griffon helicopters in Latvia.
The government has created a new Major Projects Office to streamline approvals, but officials noted it may not apply to all projects that fall under the Impact Assessment Act.
The federal lands initiative, designed to convert surplus federal property to housing, is on track to meet its target of 4,000 committed units, but only about 40% of those are expected to be ready for occupancy by 2028.
The Parliamentary Budget Officer’s outlook projects that annual public debt charges will rise from $53.6 billion this year to $82.4 billion by 2030.
The Sustainable Agriculture Strategy (SAS) is currently “on hold” after major grain and oilseed associations stepped back from the advisory committee, citing a lack of industry alignment.
The Data Brief
$68.5 billion: The Parliamentary Budget Officer’s projected federal deficit for the 2025-26 fiscal year.
<2%: The total reduction in federal office space achieved between 2019 and 2024, despite a long-term goal of 50%.
15 million tonnes: The estimated size of Canada’s rare earth element reserves, among the largest in the world.
$30.6 million: The amount in “pay at risk” compensation, described as bonuses, paid to Canada Mortgage and Housing Corporation employees and executives last year.
99%: The approximate percentage of CMHC executives who received this performance-based pay.
Sources
House of Commons. (2025, September 25). Standing Committee on Agriculture and Agri-Food, Evidence, Number 004, 45th Parliament, 1st Session.
House of Commons. (2025, September 25). Standing Committee on Environment and Sustainable Development, Evidence, Number 004, 45th Parliament, 1st Session.
House of Commons. (2025, September 25). Standing Committee on Foreign Affairs and International Development, Evidence, Number 003, 45th Parliament, 1st Session.
House of Commons. (2025, September 25). Standing Committee on Government Operations and Estimates, Evidence, Number 004, 45th Parliament, 1st Session.
House of Commons. (2025, September 25). Standing Committee on Justice and Human Rights, Evidence, Number 004, 45th Parliament, 1st Session.
House of Commons. (2025, September 25). Standing Committee on Natural Resources, Evidence, Number 003, 45th Parliament, 1st Session.
House of Commons. (2025, September 25). Standing Committee on Official Languages, Evidence, Number 002, 45th Parliament, 1st Session.
House of Commons. (2025, September 25). Standing Committee on Public Accounts, Evidence, Number 006, 45th Parliament, 1st Session.